Tag Archives: Fiscal Policy

Fiscal Risk and the Portfolio of Government Programs

From Sam Hanson, David Scharfstein, and Adi Sunderam: This paper proposes a new approach to social cost-benefit analysis using a model in which a benevolent government chooses risky projects in the presence of market failures and tax distortions. The government internalizes … Continue reading

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Fiscal Policy in a Changing World

From Larry Summers: I invite you to consider how the prodigious change associated with information technology that may be qualitatively different from past technological change may have defining implications for our economy going forward. If I have caused you to … Continue reading

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The battle over the US budget is the wrong fight

From Larry Summers: This month Washington is consumed by the impasse over reopening the government and raising the debt limit. It seems likely that this episode, like the 1995-96 government shutdowns and the 2011 debt limit scare, will be remembered mainly … Continue reading

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The Time for Austerity: Estimating the Average Treatment Effect of Fiscal Policy

From Oscar Jorda and Alan Taylor: Elevated government debt levels in advanced economies have risen rapidly as sovereigns absorbed private-sector losses and cyclical deficits blew up in the Global Financial Crisis and subsequent slump. A rush to fiscal austerity followed but its justifications and impacts … Continue reading

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Is Forgiving Student Loans the Worst Idea Ever?

The third pillar of President Obama’s new college affordability plan is “ensuring that student debt remains affordable.” Here’s a bit more detail: The President has proposed allowing all student borrowers to cap their federal student loan payments at 10 percent of … Continue reading

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On Keeping Your Powder Dry: Fiscal Foundations of Financial and Price Stability

From Maury Obstfeld: Banking systems have rapidly grown to a point where for many countries bank assets amount to multiples of GDP. As a consequence, government’s capacity to provide stability-enhancing fiscal guarantees against systemic crises can no longer be taken for … Continue reading

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Larry Summers on “The Fiscal and Economic Effects of Austerity”

From Larry Summers: Thank you for the opportunity to speak before this committee. You have chosen to address issues relating to austerity at an opportune time as both our economic and our budget situations are in considerable flux and as … Continue reading

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